Apple agrees to dish out $100 million in iTunes credits to settle lawsuit

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Apple has agreed to shell out more than $100 million in iTunes store credits in order to settle a class action lawsuit that alleged children were able to make app purchases on the iPhone and iPad without parental consent. The suit was filed two years ago by a group of five parents who were angry their kids were able to make in-game app purchases without their knowledge.

The suit alleged that Apple failed to adequately disclose the fact that third-part game apps, which are largely available free of charge and rated as appropriate for children, contained the ability to make in-app purchases.

To settle the dispute, Apple has agreed to give an iTunes store credit of $5 to more than 23 million people affected by the company’s negligence. Those with claims of purchases of $30 or more can elect to receive a cash refund instead of store credit. A hearing for the proposed settlement is scheduled to take place Friday. We are told that the final settlement figure could vary slightly.

Cupertino has since added additional steps that make it more difficult for children to “accidentally” make in-app purchases without consent. As of March 2011, customers are now required to enter their Apple account password whenever an in-app purchase is made. The added security measure came as part of iOS 4.3 which also introduced personal hotspots, a faster JavaScript engine, iTunes home sharing and new AirPlay features.

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